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Boost Your TFSA Returns With These Winning Canadian Stocks

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Image source: Getty Images

Written by Jed Lloren at The Motley Fool Canada

Investing in a Tax-Free Savings Account (TFSA) is very important to do, in my opinion, if you hope to achieve financial independence. That’s because, as its name suggests, any gains generated in these accounts can be withdrawn tax free. That could help investors snowball their accounts much faster. In addition, by investing in excellent Canadian stocks, investors could boost returns even more. In this article, I’ll discuss three top stocks that could do just that.

Invest in this top tech stock

If I could only invest in one Canadian tech stock, it would likely be Constellation Software (TSX:CSU). For those that are unfamiliar, this company acquires vertical market software (VMS) businesses. Upon completing an acquisition, Constellation Software then provides the coaching and resources necessary to turn the acquired businesses into exceptional business units. Since its founding, this strategy has proven to be very successful, and investors have benefited greatly.

As of this writing, Constellation Software stock has gained more than 14,200% since its initial public offering in 2006. That represents a compound annual growth rate (CAGR) of nearly 34%. Like many other tech stocks, Constellation Software stock suffered through most of 2022, falling over 20%. However, since then, the stock has bounced back and reached new heights. Since hitting its lowest point last year, Constellation Software stock has gained 44% and I believe it could continue to grow strongly moving forward.

A reliable company for your portfolio

If you’re interested in a safer pick, then you could turn your attention towards a more conservative pick. Canadian National Railway (TSX:CNR) would be an example of such a stock. This company operates nearly 33,000 km of track, which spans from British Columbia to Nova Scotia. Because of the wide reach that this company has, Canadian National has become one of the most recognizable names in the country.

Over the past five years, Canadian National Railway stock has gained nearly 50% (dividends excluded). That’s a very respectable growth rate for a company of this size. Speaking of its dividend, Canadian National ranks among the elite, when it comes to Canadian Dividend Aristocrats. The company has increased its dividend distribution in each of the past 26 years, making it one of only 11 TSX-listed companies to reach that mark.

Have you considered this stock already?

Finally, investors should consider adding Alimentation Couche-Tard (TSX:ATD) to their portfolio. If you’ve never heard of this company, perhaps you’re familiar with some of the other banners that it operates under. That includes Mac’s, Circle K, On the Run, Dairy Mart, and many more. All considered, Alimentation Couche-Tard operates more than 14,000 locations across the globe.

Over the past five years, Alimentation Couche-Tard stock has gained nearly 150%. These returns would even be a bit higher if dividends were considered. Speaking of which, Alimentation Couche-Tard is another stock that investors should heavily consider for its dividend. Since 2012, Alimentation Couche-Tard’s dividend has grown nearly 10-fold (CAGR of about 25%).

The post Boost Your TFSA Returns With These Winning Canadian Stocks appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Alimentation Couche-Tard?

Before you consider Alimentation Couche-Tard, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Alimentation Couche-Tard wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 4/18/23

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Fool contributor Jed Lloren owns shares of Constellation Software.

2023